Non Profit

What is a Non-Profit Organisation?
A non-profit organisation is any society, association or organisation that:

  • Is not carried on for the profit or gain of any member and
  • Have rules that do not allow money, property or any other benefits to be distributed to any of its members.

How Does a Non-Profit Organisation Work?

Some non-profit organisations may be incorporated. That is, they may be registered with the Ministry of Economic Development Business and Registries Branch (under the 'Related websites" section of IRD’s site.)

Non-profit organisations can have profit-making activities taxed as business income in the normal way. These organisations must have written rules that meet certain criteria to get an income tax exemption.

Tax Rates for Non-Profit Organisations
A deduction of up to $1,000 per year is available for some non-profit organisations. By deducting this amount from the organisation's net income you reduce the amount of tax to pay.

There are a number of income tax exemptions your organisation may be entitled to, as long as none of its income or funds can be distributed to any of its members. The organisation's main aims and activities must meet the requirements of the particular exemption.

Income tax exemptions are not automatic. You will need to apply in writing to IRD stating the exemption you are applying for, and include:

  • A copy of your organisation's written rules, constitution or founding documents
  • A copy of the certificate of incorporation, if your organisation is incorporated
  • Details of how your organisation will operate.

If the organisation has profit-making activities, it must pay income tax. Non-profit organisations that are registered and incorporated under the Incorporated Societies Act 1908 are taxed at the rate of 33 cents in the dollar. Unincorporated organisations are taxed at the same rate as individuals.

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Some content was obtained from the IRD and incl without change to ensure total accuracy and compliance with current law.